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does an attorney in fact need to be a lawyer | no an attorney in fact can be anyone you wish to designate as such often they are a family member or close friend that said there is nothing to prevent you from choosing a lawyer also known as an attorney at law as your attorney in fact | |
what s the difference between an attorney and attorney in fact | it s important to note that an attorney in fact is not the same as a lawyer or an attorney a lawyer is a professional who is licensed to practice law while an attorney in fact is simply a person who has been given the authority to act on behalf of another person | |
are power of attorney and attorney in fact the same thing | absolutely not an attorney in fact is someone whom you designate to act on your behalf in business financial or personal matters a power of attorney is a legal document that names and transfers power to your attorney in fact when making decisions on your behalf the attorney in fact is usually required to show the power... | |
what are the liabilities of being an attorney in fact | as an attorney in fact you are legally responsible for carrying out the duties and responsibilities assigned to you by the principal this means that you have a legal obligation to act in the best interests of the principal and to follow the instructions and guidelines set forth in the power of attorney if you fail to f... | |
what is attribution analysis | attribution analysis is a sophisticated method for evaluating the performance of a portfolio or fund manager also known as return attribution or performance attribution it attempts to quantitatively analyze aspects of an active fund manager s investment selections and decisions and to identify sources of excess returns... | |
how attribution analysis works | attribution analysis focuses on three factors the manager s investment picks and asset allocation their investment style and the market timing of their decisions and trades the method begins by identifying the asset class in which a fund manager chooses to invest an asset class generally describes the type of investmen... | |
what is attrition in business | the term attrition refers to a gradual but deliberate reduction in staff numbers that occurs as employees leave a company and are not replaced it is commonly used to describe the downsizing of a firm s employee pool by human resources hr professionals in this case downsizing is voluntary where employees either resign o... | |
how does employee attrition differ from customer attrition | employee attrition refers to a decrease in the number of employees working for a company that occurs when employees leave and aren t replaced customer attrition on the other hand refers to a shrinking customer base | |
is employee attrition good or bad | the loss of employees can be a problem for corporations because it can mean the reduction of valued talent in the workforce however it can also be a good thing attrition can force a firm to identify the issues that may be causing it it also allows companies to cut down labor costs as employees leave by choice and they ... | |
how can i stop customer attrition | you can prevent customer attrition by making sure that your company offers the products and services that your customers want provides them with excellent customer service stays current with market trends and addresses any problems that arise as a result of customer complaints the bottom lineattrition refers to the gra... | |
what is an auction market | in an auction market buyers enter competitive bids and sellers submit competitive offers at the same time the price at which a stock trades represents the highest price that a buyer is willing to pay and the lowest price that a seller is willing to accept matching bids and offers are then paired together and the orders... | |
what is an audit | an audit is a formal review of a person or company s financial records by professional accountants audits can be conducted internally by employees of the organization or externally by an outside certified public accountant cpa firm lenders and underwriters may require an audit in order to evaluate a company s financial... | |
what s the purpose of an audit | audits are generally meant to ensure that businesses and individuals are being honest and accurate about their financial positions but the purpose of an audit depends entirely on the type of review in question corporations are routinely audited to ensure that they re compliant and are following accounting standards aud... | |
are audits a bad thing | the term audit conjures up negative feelings for a lot of people because they re usually associated with tax agencies that want to review tax returns people often believe they ll be responsible for a hefty tax bill after an audit but being audited isn t necessarily a bad thing most agencies just want to ensure that you... | |
how do i prepare for an irs audit | it may seem daunting but an irs audit shouldn t worry you the agency routinely conducts audits for corporations and individuals some are selected randomly others are flagged because of certain types of income credits and deductions the best way to prepare for an audit is to keep your tax records in a location that s ea... | |
what is an audit committee | an audit committee is one of the major operating committees of a company s board of directors that is in charge of overseeing financial reporting and disclosure all u s publicly traded companies must maintain a qualified audit committee in order to be listed on a stock exchange committee members must be made up of inde... | |
how an audit committee works | the audit committee works closely with auditors to ensure that company s books are correct and that no conflicts of interest exist between auditors or any outside consulting firms employed by the company ideally the chair of the audit committee will be a certified public accountant cpa often however a cpa is not availa... | |
what is audit risk | audit risk is the risk that financial statements are materially incorrect even though the audit opinion states that the financial reports are free of any material misstatements understanding audit riskthe purpose of an audit is to reduce the audit risk to an appropriately low level through adequate testing and sufficie... | |
what is an auditor | an auditor is a person authorized to review and verify the accuracy of financial records and ensure that companies comply with tax laws they protect businesses from fraud point out discrepancies in accounting methods and on occasion work on a consultancy basis helping organizations to spot ways to boost operational eff... | |
when an auditor is unable to give an unqualified opinion they will issue a qualified opinion a statement suggesting that the information provided is limited in scope and or the company being audited has not maintained gaap accounting principles 4 | auditors assure potential investors that a company s finances are in order and accurate as well as provide a clear picture of a company s worth to help investors make informed decisions types of auditorsauditor qualificationsexternal auditors working for public accounting firms require a certified public accountant cpa... | |
what is an auditor s opinion | an auditor s opinion is a certification that accompanies financial statements it is based on an audit of the procedures and records used to produce the statements and delivers an opinion as to whether material misstatements exist in the financial statements an auditor s opinion may also be called an accountant s opinio... | |
what is an auditor s report | an auditor s report is a written letter from the auditor containing their opinion on whether a company s financial statements comply with generally accepted accounting principles gaap and are free from material misstatement the independent and external audit report is typically published with the company s annual repor... | |
how an auditor s report works | an auditor s report is a written letter attached to a company s financial statements that expresses its opinion on a company s compliance with standard accounting practices the auditor s report is required to be filed with a public company s financial statements when reporting earnings to the securities and exchange co... | |
what is an augmented product | an augmented product has been enhanced by its seller with added features or services to distinguish it from the same product offered by its competitors augmenting a product involves including intangible benefits or add ons that go beyond the product itself examples of the features used to create augmented products migh... | |
how an augmented product works | to marketing professionals every product comes in at least three versions the core the actual and the augmented the core product is not a physical object it is the product s benefit to the consumer for example a lipstick will make its buyer attractive a pair of sneakers will make her healthier a new phone will help you... | |
what is austerity | the term austerity refers to a set of economic policies that a government implements in order to control public sector debt governments put austerity measures in place when their public debt is so large that the risk of default or the inability to service the required payments on its obligations becomes a real possibil... | |
how austerity works | governments experience financial instability when their debt outweighs the amount of revenue they receive resulting in large budget deficits debt levels generally increase when government spending increases as mentioned above this means that there is a greater chance that federal governments can default on their debts ... | |
what is a budget deficit | a budget deficit happens when spending is higher than revenue for a country this means that its spending is higher than the money is takes in usually from taxes when this happens governments must borrow money usually by issuing bonds this increases the country s national debt | |
what happens when a country defaults | sovereign default happens when a country cannot pay its debts unlike when an individual defaults a country cannot be forced to pay its debts but default can cause other economic problems it may trigger a recession or cause the country s currency to lose value a country that defaults may also struggle to borrow money in... | |
do austerity measures work | economists disagree on whether austerity measures work as they are intended to supporters of austerity measures argue that large deficits are damaging to the broader economy which can limit tax revenue austerity under this argument is effective because it lowers government spending and decreases deficits opponents argu... | |
what is the australian securities exchange asx | the australian securities exchange is headquartered in sydney australia the exchange in its current form was created through the merger of the australian stock exchange and sydney futures exchange in 2006 1 the asx acts as a market operator clearing house and payments facilitator it also provides educational materials ... | |
what is autarky | autarky refers to a nation that operates in a state of self reliance nations that follow a policy of autarky are characterized by self sufficiency and limited trade with global partners the definition of autarky comes from the greek autos meaning self and arkein meaning to ward off and to be strong enough to suffice a ... | |
what is authorized stock | authorized stock or authorized shares refers to the maximum number of shares that a corporation is legally permitted to issue as specified in its articles of incorporation in the u s or in the company s charter in other parts of the world it is also usually listed in the capital accounts section of the balance sheet au... | |
why a company might not issue all of its authorized shares | the number of authorized shares is typically higher than those actually issued which allows the company to offer and sell more shares in the future if it needs to raise additional funds for example if a company has 1 million authorized shares it might only sell 500 000 of the shares during its initial public offering i... | |
what is autocorrelation | autocorrelation is a mathematical representation of the degree of similarity between a given time series and a lagged version of itself over successive time intervals it s conceptually similar to the correlation between two different time series but autocorrelation uses the same time series twice once in its original f... | |
when calculating autocorrelation the result can range from 1 to 1 | an autocorrelation of 1 represents a perfect positive correlation an increase seen in one time series leads to a proportionate increase in the other time series on the other hand an autocorrelation of 1 represents a perfect negative correlation an increase seen in one time series results in a proportionate decrease in ... | |
what is the difference between autocorrelation and multicollinearity | autocorrelation is the degree of correlation of a variable s values over time multicollinearity occurs when independent variables are correlated and one can be predicted from the other an example of autocorrelation includes measuring the weather for a city on june 1 and the weather for the same city on june 5 multicoll... | |
why is autocorrelation problematic | most statistical tests assume the independence of observations in other words the occurrence of one tells nothing about the occurrence of the other autocorrelation is problematic for most statistical tests because it refers to the lack of independence between values | |
what is autocorrelation used for | autocorrelation can be used in many disciplines but is often seen in technical analysis technical analysts evaluate securities to identify trends and make predictions about their future performance based on those trends the bottom lineautocorrelation is the correlation of a time series and its lagged version over time ... | |
what is the automated clearing house ach | the automated clearing house ach is an electronic funds transfer system run by nacha it serves as a versatile feature for conducting digital transactions by processing large volumes of credit and debit transactions for this reason many banks brokerages and private retail businesses have made this feature available to t... | |
how the automated clearing house ach works | the ach network is an electronic system that serves financial institutions to facilitate financial transactions in the u s it represents more than 10 000 financial institutions ach transactions totaled more than 80 1 trillion in 2023 by enabling over 31 billion electronic financial transactions 2the network essentially... | |
how does the automated clearing house work | an automated clearing house or ach transaction begins with a request from the originator their bank batches the transaction with others to be sent out during the day the batch is received and sorted by a clearinghouse which sends individual transactions out to receiving banks each receiving bank deposits the money into... | |
what is an automated clearing house transaction | an automated clearing house or ach transaction is an electronic transaction that requires a debit from an originating bank and a credit to a receiving bank transactions go through a clearinghouse that batches and sends them to the recipient s bank transactions usually are executed on the same day as long as they are do... | |
are there any disadvantages to automated clearing house transactions | ach transactions may come with fees depending on your bank this means the more you do the more you ll spend on fees certain banks limit the amount of money you can transfer through the system so if you want to transfer large amounts of money to other people you may have to do so through multiple transactions the bottom... | |
what is the automated customer account transfer service acats | the automated customer account transfer service acats is a system that facilitates the transfer of securities from one trading account to another at a different brokerage firm or bank the national securities clearing corporation nscc developed the acats system replacing the previous manual asset transfer system with th... | |
how the automated customer account transfer service acats works | the acats system is initiated when the new receiving firm has the client sign the appropriate transfer documents once the document is received in good order the receiving firm submits a request using the client s account number and sends it to the delivering firm if the information matches between both the delivering f... | |
how does an acats transfer work | an acats transfer is initiated by a brokerage customer at the receiving institution by submitting a transfer information ti record the ti contains all of the information needed to identify the customer s existing brokerage account and where it will be delivered the delivering firm must respond to the output within one ... | |
what is the difference between an acats and non acats transfer | the main difference between an acats transfer and a manual non acats transfer is primarily one of automating the process such that it cuts the delivery time down to 3 6 business days for acats vs up to one month or more for a non acats transfer the other difference is that the automated system is far less prone to mist... | |
what is an acat out fee | some brokers charge existing customers a fee to acat assets out of their account to a new brokerage this fee can be as high as 100 or more per transfer brokerage firms charge this fee to make it more costly to close the account and move assets elsewhere not all brokerages charge these fees so check with yours before in... | |
what is an automated teller machine atm | an automated teller machine atm is an electronic banking outlet that allows customers to complete basic transactions without the aid of a branch representative or teller anyone with a credit card or debit card can access cash at most atms either in the u s or other countries atms are convenient allowing consumers to pe... | |
how to use an atm | to use an atm you typically insert your bank cards and follow the prompts to withdraw cash which is dispensed through a slot atms require you to use a plastic card either a bank debit card or a credit card to complete a transaction your identity is authenticated by a pin before any transaction can be made many cards co... | |
how much can you withdraw from an automated teller machine atm | the amount that you can withdraw from an automated teller machine atm per day per week or per month will vary based on your bank and account status at that bank for instance some banks limit daily cash withdrawals to 300 but most citibank accounts allow up to 1 500 depending on your account 10 you may be able to get ar... | |
how do you make a deposit at an atm | if you are a bank s customer you may be able to deposit cash or checks via one of their atms to do this you may simply need to insert the checks or cash directly into the machine other machines may require you to fill out a deposit slip and put the money into an envelope before inserting it into the machine be sure to ... | |
which bank installed the first atm in the u s | the first atm in the u s was installed by chemical bank in rockville center long island new york in 1969 two years after barclays installed the first atm in the u k by the end of 1971 more than 1 000 atms were installed worldwide 11the bottom lineatm or automated teller machine is a machine that lets you get cash from ... | |
what is an automatic bill payment | an automatic bill payment is a money transfer scheduled on a predetermined date to pay a recurring bill automatic bill payments are routine payments made from a banking brokerage or mutual fund account to vendors automatic payments are usually set up with the company receiving the payment though it s also possible to s... | |
how an automatic bill payment works | automatic bill payments can be scheduled for all types of payment transactions this can include installment loans auto loans mortgage loans credit card bills electric bills cable bills and more these payments can be automated quite easily from a checking account setting up automatic bill payment involves making arrange... | |
what is an automatic premium loan | an automatic premium loan apl is an insurance policy provision that allows the insurer to deduct the amount of an outstanding premium from the value of the policy when the premium is due automatic premium loan provisions are most commonly associated with cash value life insurance policies such as whole life and allow a... | |
what kinds of life insurance policies are eligible to include an automatic premium loan provision | automatic premium loans can only be made from permanent policies that have a cash value component these include whole life policies and some universal life ul policies because universal life policies deduct expenses from the cash value they do not always allow alp | |
what is the automatic premium loan provision designed to do | automatic premium loans are designed to keep life insurance coverage in force even after the policy owner has not paid the required premiums on time perhaps the policy owner is unable to pay due to financial or other difficulties or simply forgot either way the apl provision allows the death benefit to remain even in s... | |
does an automatic premium loan decrease the death benefit of a policy | potentially any outstanding loans along with interest due will be deducted from the death benefit amount if the insured passes away before these are paid back | |
what is an automatic stabilizer | automatic stabilizers are a type of fiscal policy designed to offset fluctuations in a nation s economic activity through their normal operation without additional timely authorization by the government or policymakers the best known automatic stabilizers are progressively graduated corporate and personal income taxes ... | |
when an economy is in a recession automatic stabilizers may by design result in higher budget deficits this aspect of fiscal policy is a tool of keynesian economics that uses government spending and taxes to support aggregate demand in the economy during economic downturns | by taking less money out of private businesses and households in taxes and giving them more in the form of payments and tax refunds fiscal policy is supposed to encourage them to increase or at least not decrease their consumption and investment spending in this case the goal of fiscal policy is to help prevent an econ... | |
what is autonomous consumption | autonomous consumption is defined as the expenditures that consumers must make even when they have no disposable income certain goods need to be purchased regardless of how much income or money a consumer has in their possession at any given time when a consumer is low on resources paying for these necessities can forc... | |
what is an autonomous expenditure | an autonomous expenditure describes the components of an economy s aggregate expenditure that are not impacted by that same economy s real level of income this type of spending is considered automatic and necessary whether occurring at the government level or the individual level the classical economic theory states th... | |
what is an autoregressive model | a statistical model is autoregressive if it predicts future values based on past values for example an autoregressive model might seek to predict a stock s future prices based on its past performance understanding autoregressive modelsautoregressive models operate under the premise that past values have an effect on cu... | |
what is an autoregressive integrated moving average arima | an autoregressive integrated moving average or arima is a statistical analysis model that uses time series data to either better understand the data set or to predict future trends a statistical model is autoregressive if it predicts future values based on past values for example an arima model might seek to predict a ... | |
how to build an arima model | to begin building an arima model for an investment you download as much of the price data as you can once you ve identified the trends for the data you identify the lowest order of differencing d by observing the autocorrelations if the lag 1 autocorrelation is zero or negative the series is already differenced you may... | |
what is arima used for | arima is a method for forecasting or predicting future outcomes based on a historical time series it is based on the statistical concept of serial correlation where past data points influence future data points | |
what are the differences between autoregressive and moving average models | arima combines autoregressive features with those of moving averages an ar 1 autoregressive process for instance is one in which the current value is based on the immediately preceding value while an ar 2 process is one in which the current value is based on the previous two values a moving average is a calculation use... | |
how does arima forecasting work | arima forecasting is achieved by plugging in time series data for the variable of interest statistical software will identify the appropriate number of lags or amount of differencing to be applied to the data and check for stationarity it will then output the results which are often interpreted similarly to that of a m... | |
what is an available balance | the available balance in a checking account or on demand account is the total amount that the account holder is free to use immediately the available balance is the total amount that has been cleared for deposits or transfers to the account after all deductions and withdrawals have been processed a credit card account ... | |
when you log into your online banking portal you will normally see two balances at the top the available balance and the current balance | the available balance shows the amount available for immediate use in your account this balance is updated continuously throughout the day any electronic activity that takes place in the account whether it s a transaction through a teller an automated teller machine atm at a store or online affects this balance almost ... | |
what is current balance on a credit card | current balance on a credit card is the total amount that the account holder owes to the issuer of the credit card this is not the same as the statement balance the statement balance is the sum of all of the charges incurred and all of the payments made during the most recent monthly billing cycle as well as the total ... | |
what is a demand account | a demand account is a checking account it s a place to stash your cash until you demand it whether you do that by withdrawing money from an atm or paying a bill online in the financial world money in a checking account is the equivalent of cash it can be withdrawn by the account holder at will by contrast if you put yo... | |
what is an available for sale security | an available for sale security afs is a debt or equity security purchased with the intent of selling before it reaches maturity or holding for a long period of time should it not have a maturity date accounting standards require companies to classify any investments in debt or equity securities when they are purchased ... | |
how an available for sale security works | afs is an accounting term used to describe and classify financial assets it refers to a debt or equity security not classified as a held for trading or held to maturity security the two other kinds of financial assets afs securities are nonstrategic and usually have a ready market price available the unrealized gains a... | |
is available for sale a current asset | available for sale securities can be classified as current assets if they are held for less than one year which is the definition of a current asset if they are to be held for more than a year then they have to be classified as a long term asset | |
what is the difference between held to maturity and available for sale | both held to maturity and available for sale are methods of recording investment securities held by a company htm securities are held until they mature afs securities are sold before they mature the former is recorded at cost minus impairment the latter is recorded at fair value | |
what is an htm strategy | an htm strategy is a held to maturity strategy the goal of an htm strategy can be to protect against adverse interest rates create portfolio diversification or earn a small return on low risk securities the bottom line | |
when a company purchases an investment security whether that be equity or debt it must be classified in one of three ways per accounting standards held to maturity held for trading or available for sale | an available for sale security is one that is sold before it reaches maturity any unrealized gains or losses on the security must be recorded as accumulated comprehensive income until it is sold | |
what is the average age of inventory | the average age of inventory is the average number of days it takes for a firm to sell off inventory it is a metric that analysts use to determine the efficiency of sales the average age of inventory is also referred to as days sales in inventory dsi formula and calculation of average age of inventorythe formula to cal... | |
what the average age of inventory can tell you | the average age of inventory tells the analyst how fast inventory is turning over at one company compared to another the faster a company can sell inventory for a profit the more profitable it is however a company could employ a strategy of maintaining higher levels of inventory for discounts or long term planning effo... | |
what is average annual growth rate aagr | the average annual growth rate aagr reports the mean increase in the value of an individual investment portfolio asset or cash flow on an annualized basis it doesn t take compounding into account formula for average annual growth rate aagr aagr gra grb grnnwhere gra growth rate in period agrb growth rate in period bgrn... | |
what does the average annual growth rate aagr tell you | the average annual growth rate aagr identifies long term trends of such financial measures as cash flows or investment returns aagr tells you what the annual return has been on average but it does not take into account compounding | |
what are the limitations of average annual growth rate | aagr may overestimate the growth rate if there are both positive and negative returns it also does not include any measure of the risk involved such as price volatility nor does it factor in the timing of returns | |
how does average annual growth rate differ from compounded annual growth rate cagr | average annual growth rate aagr is the average increase it is a linear measure and does not take into account compounding meanwhile the compound annual growth rate cagr does and it smooths out an investment s returns diminishing the effect of return volatility | |
how do you calculate the average annual growth rate aagr | the average annual growth rate aagr is calculated by finding the arithmetic mean of a series of growth rates | |
what is the average annual return aar | the average annual return aar is a percentage used when reporting the historical return such as the three five and 10 year average returns of a mutual fund the average annual return is stated net of a fund s operating expense ratio additionally it does not include sales charges if applicable or portfolio transaction br... | |
when you are selecting a mutual fund the average annual return is a helpful guide for measuring a fund s long term performance however investors should also look at a fund s yearly performance to fully appreciate the consistency of its annual total returns | for example a five year average annual return of 10 looks attractive however if the yearly returns those that produced the average annual return were 40 30 10 5 and 15 50 5 10 performance over the past three years warrants examination of the fund s management and investment strategy components of an average annual retu... | |
what is average inventory | average inventory is a calculation that estimates the value or number of a particular good or set of goods during two or more specified time periods average inventory is the mean value of inventory within a certain time period which may vary from the median value of the same data set and is computed by averaging the st... | |
when calculating a three month inventory average the shoe company achieves the average by adding the current inventory of 10 000 to the previous three months of inventory recorded as 9 000 8 500 and 12 000 and dividing it by the number of data points as follows | average inventory 10 000 9 000 8 500 12 000 4this results in an average inventory of 9 875 over the time period being examined | |
what is an average collection period | average collection period refers to the amount of time it takes for a business to receive payments owed by its clients in terms of accounts receivable ar companies use the average collection period to make sure they have enough cash on hand to meet their financial obligations the average collection period is an indicat... | |
how average collection periods work | accounts receivable is a business term used to describe money that entities owe to a company when they purchase goods and or services companies normally make these sales to their customers on credit ar is listed on corporations balance sheets as current assets and measures their liquidity as such they indicate their ab... | |
when analyzing average collection period be mindful of the seasonality of the accounts receivable balances for example analyzing a peak month to a slow month by result in a very inconsistent average accounts receivable balance that may skew the calculated amount | average collection period also relies on net credit sales for a period this metric should exclude cash sales as those are not made on credit and therefore do not have a collection period in addition to being limited to only credit sales net credit sales exclude residual transactions that impact and often reduce sales a... | |
when calculating average collection period ensure the same timeframe is being used for both net credit sales and average receivables for example if analyzing a company s full year income statement the beginning and ending receivable balances pulled from the balance sheet must match the same period | importance of average collection periodaverage collection period boils down to a single number however it has many different uses and communicates a variety of important information | |
how to use average collection period | the average collection period does not hold much value as a stand alone figure instead you can get more out of its value by using it as a comparative tool the best way that a company can benefit is by consistently calculating its average collection period and using it over time to search for trends within its own busin... | |
what is the average cost basis method | the average cost basis method is a system of calculating the value of mutual fund positions held in a taxable account to determine the profit or loss for tax reporting cost basis represents the initial value of a security or mutual fund that an investor owns the average cost is then compared with the price at which the... | |
how is the average cost basis method used | investors commonly use the average cost basis method for mutual fund tax reporting a cost basis method is reported with the brokerage firm where the assets are held | |
what are mutual funds | mutual funds are pooled investments managed by professional money managers they trade on exchanges and provide investors with access to a wide mix of assets selected for the fund | |
what is cost basis | cost basis is the original value of an asset for tax purposes usually the purchase price adjusted for stock splits dividends and return of capital distributions this value is used to determine the capital gain which is equal to the difference between the asset s cost basis and the current market value |
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